The study investigated the productivity and resource use efficiency of milk production of small scale dairy farmers in Bangladesh. A total of 280 cattle farmers were interviewed in five different districts of Bangladesh. The selection of sample was done using stratified random sampling technique. Apart from descriptive analyses, two types of models such as CobbDouglas type stochastic frontier production function and conventional average Cobb-Douglas type income function was estimated. Milk production of crossbreed was found significantly higher than that of indigenous cow. Farmer's education was positively associated with technical efficiency in milk production. Some important predictors of household income were identified. Analyses further suggested that milk production of local breed and crossbred cow can be increased by 41% and 40%, respectively by increasing the farmer's technical efficiency with the same resource base and technologies. The study recommended that all the livestock farmers should be given training on technical aspects of milk production and livestock health with a view to increasing milk production.